Counterwave outsourcing

Counterwave outsourcing[edit]

There has been a recent overturn of the tendency to outsource. The most recent trends in outsourcing and offshoring have been precisely the opposite force as companies are drifting back to perform tasks themselves and develop facilities back in their home Western locations.

Many firms are undoing their steps in outsourcing because the consequences were not entirely as expected. The circumstances which allow firms to unbundle the different tasks or stages of its manufacturing process into different locations have not been fully determined. Though the nature of the tasks plays a role determining their interconnectedness, other factors such as innovation in the manufacturing process or advances in transport and communication technology also affect the need for direct contact among employees. As the process which ties tasks together within firms remains unclear, there is a degree of uncertainty about which tasks need to remain geographically clustered together. In many cases firms took risks experimenting with outsourcing while lacking a firm understanding of the relationship among internal tasks and its spatial implications.^[38]

Despite saving money, companies have often faced unexpected drawbacks from outsourcing, such as miscommunication or lower quality of intermediate products, which end up delaying the overall production process. According to a Deloitte Consulting survey carried out in 2005, a quarter of the companies which had outsourced tasks had to reverse their strategy. Many big companies like Lenovo are increasingly considering turning around strategies of outsourcing.^[58]

Another reason for a decrease in outsourcing is that many jobs that were subcontracted abroad have been replaced by technological advances.^[58]

Public opinion in the US and other Western powers opposing outsourcing was particularly strengthened by the drastic increase in unemployment as a result of the 2007-2008 financial crisis. In the first decade from 2000 to 2010, the US experienced a net loss of 687,000 jobs due to outsourcing, primarily in the computers and electronics sector. Public disenchantment with outsourcing has not only stirred political responses, as seen in the 2012 US Presidential campaigns, but it has also made companies more reluctant to outsource or offshore jobs.^[58]

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